It is estimated that in the UK SME’s lose over £9bn through invoice fraud every year. This amounts to £1,658 per SME! Of those affected, one in six believe the fraud has cost more than £5,000 and 54% of businesses view it as their single biggest threat. Also, according to the Advertising Standards Authority (ASA), fraudsters are taking advantage of the summer months when top executives are away, to send these fake invoices.
Some concerning stats on invoice fraud in the UK:
- One in seven SME’s has been a victim of fraud in the last 12 months.
- More than a quarter of invoice fraud resulted in losses of more than £5,000.
- Only 25% of employees said they would double check an invoice before paying it.
What is invoice fraud?
Invoice fraud involves a fraudster notifying your business that supplier payment details have changed and providing alternative details in order to defraud you. The fraudster could be claiming to be from your business’s genuine supplier list, or even be posing as a member of your own firm. Funds are often quickly transferred so recovering money from fraudulent accounts can be extremely difficult
Businesses should beware of fake invoices, especially those sent during the summer months in the hope they will be paid while key management are away. Over the last 10 years the ASA have noticed a marked increase in fraudulent direct mailing over the summer months. It’s vital that small and medium sized businesses are aware of these scams and know how to deal with them.
How to help to prevent invoice fraud?
The ASA has issued these guidelines:
- Check all invoices carefully, especially those coming from overseas or unknown suppliers
- If in doubt, call the company concerned
- Always check the invoice small print
- If you pay a fake invoice, contact the company and demand a refund.
- Report immediately to the Advertising Standards Authority.
Want to avoid fake invoices during the Summer?
Consider moving over to a document capture and approval solution such as Continia’s Document Capture. Using the full approval flow in Continia’s Document Capture, you can make sure that fake invoices don’t get into your system. The advantage of having an advanced approval flow like Continia’s Document Capture is that the invoice is always available to the relevant people in your business, and during holidays, you can ensure that the process works smoothly by granting trusted colleagues access to your documents, thereby avoiding fake invoices.
Whether you are using a manual or automated process, SME’s need to be alert to invoice fraud. The fraud itself is becoming more and more sophisticated. Moving over to an automated process is a strategic decision. It will not only help you reduce the potential for fraud and mistakes, it will also streamline your payment process, giving your finance team more time to think and work strategically.